The Abbott government should wind up the Renewable Energy Target but protect current investment until 2030 or scale it back to a “real" 20 per cent target, an expert panel has recommended.

The panel, headed by businessman
Dick Warburton
, handed its review of the target to the federal government on August 15 and it is expected to be released this week.

It is understood the panel conducted modelling on five options – keeping the target in its current state; move to a 30 per cent target by 2030, move to a “real" 20 per cent target, wind back with a grandfather clause or abolish the scheme altogether.

The panel put forward the grandfather clause option as well as the ­creation of a"real" 20 per cent target – which would scale back the mandated output for renewable energy from 41,000 gigagwatt hours to about 26,000 gigawatt hours – to the government.

There are a number of ways to reach those two ends, according to the report.

The renewable energy industry has warned any moves to scrap the target will jeopardise $15 billion in renewable energy investment.

But the panel argued the grandfather clause would allow existing ­investments to work their way through the national electricity market until the target was wound up in 2030.

The panel rejected the sovereign risk argument, saying any changes to the target were more akin to standard ­regulatory risk. It also considered removing the small-scale renewable energy scheme, such as roof-top solar installations, from the target.

Related Quotes

Company Profile

Final touches

Mr Warburton did not comment on the contents of panel’s final report.

But he played down speculation he had been asked by the Abbott ­government to do more work on ­terminating the target.

“We actually finished the report by the end of July, like we said we would do, but we wanted to go over it with a fine tooth comb and do some verification of the figures because we know it’s going to be a controversial report and we wanted to make sure it was all right," Mr Warburton told The Australian Financial Review.

“We just asked for a couple more weeks to make sure it was completely tidied up. That’s the only reason for an extension."

The panel, which includes ­economist
Brian Fisher
,
Asciano
­director
Shirley In’t Veld
and Australian Energy Market Operator chief ­executive
Matt Zema
, conducted more than 100 consultations across the country looking into the scheme which mandates a target of 20 per cent of energy should come from renewable sources.

Industry had been lobbying for the target to be scrapped or significantly amended saying it was pushing up the costs of electricity.

Industry protest

But Pacific Hydro executive general manager Lane Crockett said the Abbott government needed to offer a compensation package if it was planning to reduce or scrap the target.

He said Pacific Hydro would be forced to shelve $2.5 billion in projects.

“What this government appears to be contemplating simply makes no sense at all. If it is truly considering putting the renewable energy industry on the chopping block, then the future of the renewable energy industry in this country is good as dead," he said.

Infigen Energy
said it would default on debt within three months of the ­target being scrapped if there was no compensation.

The Abbott government is expected to respond to the Warburton review in the next month.Labor has opposed any changes to the target and MP
Clive Palmer
has also refused to back any changes before the 2016 election.